State Comptroller: Tax Authority missed NIS 3b from crypto

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Matanyahu Englman blamed the Tax Authority, for not taking most of the necessary steps to improve its ability to collect the taxes from cryptocurrencies, at a time when Israel's debt burden is increasing due to the war.

The state has not working effectively in order to reach the billions of shekels invested in the cryptocurrency market and could have earned NIS 3 billion in taxes for the Ministry of Finance coffers. In his report, State Comptroller Matanyahu Englman blamed the Tax Authority, for not taking most of the necessary steps to improve its ability to collect taxes, at a time when Israel's debt burden is increasing due to the war and security needs. The State Comptroller stressed the need to examine how to collect taxes from the cryptocurrency market, before the government raises taxes for the public.

The State Comptroller examined the issue for 2018-2022, and found that during the period only 500 reports were registered on average per year to the Tax Authority about activities in the cryptocurrency market, out of a potential of about 200,000 cryptocurrency wallet owners - so that only 0.25% of transactions are reported to the Tax Authority. This is the lowest of various estimates, while the State Comptroller's maximum estimate raises the number of cryptocurrency wallet owners to about 1.7 million.

The report shows that since 2018, the Tax Authority has issued only three publications on the topic of taxation in the cryptocurrency market, and has not bothered to update the rules it published. Thus, the necessary adjustments have not taken place, despite significant developments in the market.

Published by Globes, Israel business news - en.globes.co.il - on November 5, 2024.

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